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Buying Things That Don't (Yet) Exist

Those of us in the various fandoms are accustomed to being interested in things that don't exist, but we also have a higher rate than average of buying things that don't exist...at least not yet.

Buying something that has not yet been made is hardly a new thing. Farmers with agreements to sell the crops once they're harvested, commissioning an artist to do a painting, and so forth.

Where this ties into fandom (and therefore this site), though, is the fact that so many of the objects of our desire are now delivered in an on-demand way...or in ways that grant the illusion of being on-demand. There's many ways to make a sale well in advance of delivering the goods, and companies often find it profitable to blur the lines between these ways...but at the risk of backlash when they fail to deliver, or seem to be creating false scarcity. Even if everything is delivered as promised and the scarcity is real (I'm looking at you, major comicon hotel lotteries), people can get annoyed that they get shut out before the product even exists.

To help our readers understand the differences in ways you can buy the not-yet-existent, this essay will attempt to clarify the major categories, their strengths and weaknesses, and how sometimes what might look like a company screwing its fans is actually a company trying to avoid being screwed.

"Pay When It Ships" Pre-Orders

This is probably the one most people have the most experience with. Amazon does this all the time, you can click on the Pre-Order link, and you won't be charged until the product is available. You don't have to worry about being cheated out of your money if the product never happens, although you might have to worry about getting it at all if you change address after pre-ordering and don't notify the seller.

Yeah, you can probably find one NOW....

At worst, you don't get the product but keep your money. Of course, that can still anger a lot of people, especially if pre-orders end up being several times larger than the production run. See, for instance, that one console release almost every year where pre-order customers end up standing in line anyway because there were 100 pre-orders and the store didn't get 100 consoles, it got 50.

Whether you're ordering directly from maker, or from a third party retailer like Amazon or Best Buy or your local comic shop, since you're not giving money to the maker up front, they don't have a commitment to meet the entire demand.

"Why don't they want my money?" you may ask, while posting one of those Futurama shots of Fry holding out a wad of cash.

There's two main reasons, and it tends to depend on whether the company has a lot of cash flow or not.

Companies that have a lot of cash flow (i.e. Nintendo) often want to have a limited edition for the cachet involved. "Only 1000 will ever be made," they cry, knowing that artificially limited supply will drive up demand and let them charge a premium price. Sure, they could backpedal and do a second release if pre-orders hit 100,000 or something, but that trick only works once or twice. If they really want those juicy high profit margins on their limited releases, they have to keep the releases limited. While I'm not personally going to condemn them as horrible greed-heads for doing this (I'll probably just shrug and roll my eyes when I see it happen for the Nth time), I'm certainly not going to tell anyone else to cool their jets when complaining about this kind of behavior.

On the other hand, it's unfair to smaller companies or even big ones in the middle of cash crunches to ascribe limited runs to greed. Drowning in one's own success is a well-known danger for any company who stumbles onto a massive fad. Tooling up to meet sudden spikes in demand can result in actually losing money on additional sales. Even if you're just buying time at some factory rather than building your own, getting that capacity on short notice is always a lot more expensive. You often have to pay them before you start seeing money from sales, which means that there's a hard limit on your first run capacity. There might be pre-orders for 10,000 units, but even pushing your credit limit to the max you can only afford a run of 5,000.

Your frenzied shopping amuses Beebo.

In the middle, you might just be a victim of timeline mismatch. Making physical objects and shipping them overseas takes time. Often, a pre-order might be announced only once the container ships are moving, so that distributors and major retailers can be confident that the product exists and is on the way...but what if demand spikes during that time? There's only 5,000 units on the ship, and if suddenly 20,000 people want one, at least 15,000 will have to wait until the next batch can be made...which might take long enough for the ardor to cool. And that brings us back to the drowning on success thing, if a company decides to rush through the next 15,000 before the fad fades, they might end up needing to sell all 15,000 just to break even.

So, to sum it up, when you don't put down any money up front, you don't have to worry about being cheated out of your money, but there's a lot of ways you might end up keeping your money and not getting the thing you were trying to buy.

Pre-Buying Software

This is distinct from pre-buying physical objects, covered below. In the case of software, they're not going to run out of copies, although you could end up with bottlenecks on the downloading when release day hits. A lot of games do this, particularly with add-on content.

"Ride me around for a few months to prove you paid
early for content that isn't out yet!"

There's no intrinsic value to the buyer, of course, because it's not like they'll fail to get a copy because the store ran out. So there's usually incentives offered like exclusive in-game items, early access, beta testing access, and so forth.

The advantage to the seller is a smoothing out of the revenue stream, especially if things are getting tight and they really need a cash bump now but the product isn't ready for wide release. And while copies aren't going to run out, really high pre-purchase numbers can warn them to lease extra download capacity for the release week, avoiding crashes and other player-alienating problems.

This comes with some slight danger to the customer, especially if things are really dire at the company. If the company folds before delivering the software, the customers are going to have to get in line behind the big creditors in hopes of getting a refund. And the same problem with no-pay preordering exists, the project could be cancelled and the money refunded, which means you still don't get the thing you wanted.

Kickstarter has given us an interesting variation on this practice. While many software Kickstarter projects are for things that are almost ready to go, and the Kickstarter campaign is basically just a "traditional" pre-buy that doesn't go through a major publisher or distributor, a lot of these projects are "We have an idea and a team, but need start-up funding" in nature. The odds of the project turning into vaporware go way up compared to "Pre-purchase the latest DLC for Franchise Game VI," and the timeline gets a lot longer.

For instance, when the City of Titans Kickstarter funded, it was basically at the "We have an idea and a team" level, and for games of the proposed quality the development time is several years long. You just don't normally see the whole process, because major publishers don't even say a game is coming until 3-4 years of development has been finished. Thus, even if the product is delivered as promised, you have a long wait between paying and playing.

Saurian, another game I've bought via Kickstarter, is technically playable several years after funding, but still only has one of the four "launch" species to play as, and the controls still lack any significant customizability. It's in progress, I'm confident it will be fully done in due time, but I still can't really play it because they haven't added in Y-Axis Invert yet and I keep looking down when I need to look up, which tends to get one killed fast in a survival game.Pre-Buying Physical Things

This is just the
CORE set for
the Bones IV
Kickstarter.

Now, here's where Kickstarter has really revolutionized geekdom. I mentioned the factory capacity problem earlier: if 10,000 people want your thing and you can only afford a production run of 5,000, you've just pissed off at least half your customers (some who will get a thing may still be angered by your treatment of the other half and decide to have no more to do with you).If you have an idea for a wargaming miniatures set, or a new kind of polyhedral dice, or accessories for Lego minifigures, you can do a Kickstarter. The money goes in at the front end, so as long as you actually do your budgeting correctly, once you have orders for 10,000 copies you can turn around and get 10,000 copies made, you didn't need to have a small business loan (or home equity loan, or credit card limit) big enough to handle 10,000 copies. This is basically old-fashioned commissioned work on an industrial scale. It doesn't always scale perfectly, especially if the product is advertised as hand-crafted. And there's plenty of opportunities for things to break down due to poor business skills or even outright fraud. So you could lose your money and get nothing in return, just like with pre-buying software. But you don't have to worry about seeing a really cool custom-made thingy advertised only to have it sell out on pre-orders just because you were away from your computer during the ten minutes it was available. If you ordered it and it got made at all, you will get yours.Where It Gets MuddledWe can get so accustomed to one kind of buying things that don't yet exist that we're caught off guard by the limitations of another kind."What do you mean, ships third quarter of next year?" asks someone accustomed to pre-ordering things that are already on the container ships, or pre-purchasing software that's already in closed beta."How can they sell out of a pre-order? Just make more!" cries someone used to pre-buying via Kickstarter."Who thought limiting it to 1,000 copies when last time they did this it got 50,000 pre-orders?" asks everyone, pointedly, at Nintendo, with justification.

Sometimes there's malice or greed involved, but usually it's just unavoidable that some things go awry when you're trying to buy things that aren't in stores yet. Before rage-posting, stop to think about the unique pitfalls of the way you've done business with the company in question, because it might even be something they warned you about well in advance. Dvandom, aka Dave Van Domelen, is an Assistant Professor of Physical Science at Amarillo College, maintainer of one of the two longest-running Transformers fansites in existence (neither he nor Ben Yee is entirely sure who was first), long time online reviewer of comics, has the flaming tiger but didn't go in on Bones IV, is an occasional science advisor in fiction, and part of the development team for the upcoming City of Titans MMO.